Stop the legal loan sharks

By Symon Hill

August 13, 2010

In the wake of the economic crisis, we've all been encouraged to be more realistic about debt. It's a message that will be of little use to those who are forced into the hands of loan sharks by desperation, poverty and the refusal of banks to give them credit. And for all the government's words about financial responsibility, they're letting the loan sharks get away with it.

Incredibly, UK law places no upper limit on the amount that lenders can charge for credit. There are cases of loan sharks charging £83 in interest and 'collection charges' for every £100 borrowed. The Office for Fair Trading calculates that some such lenders are making £16,000 per hour in "excess" profit. The debt caused by our society's economic problems means that loan sharks have even more opportunity to prey on vulnerable people.

And it's all entirely legally.

As the organisation Compass puts it, “It's another case of ordinary people picking up the tab for the mistakes of bankers”.

Church Action on Poverty have been campaigning on this issue for some time. This week, a broad coalition of activists, campaigners, citizens' groups and MPs have issued a statement calling for an end to legal loan sharking.

They point out that while the government have rightly committed to cap the cost of credit and store cards, they are allowing the worst form of lending to go unchecked.

We can call on the government to change this. I've signed the petition launched this week, and encourage you to do so too:

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